Open Innovation and its Impact

This assignment delves into the concept of open innovation, analyzing its significance in contemporary business models. It examines research papers discussing various aspects of open innovation, including its clarification as a paradigm, the procyclicality of R&D investment, China's innovation performance, and the role of learning dynamics in supporting innovation. The assignment also explores the impact of foreign-born academic scientists on university technology commercialization and corporate innovation management. Furthermore, it investigates innovation in start-ups and its relationship with resource availability and capabilities.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
P1.Define innovation and ascertain its importance to organisations and difference with invention.
.........................................................................................................................................................3
P2. How organisational vision, leadership, culture and teamwork can shape innovation and
commercialisation............................................................................................................................5
TASK 2.................................................................................................................................................6
P3.The 4Ps of innovation and explain the use of the innovation funnel to examine and shape
innovative ideas...............................................................................................................................6
P4. Frugal innovation and its use in organisation............................................................................7
TASK 3.................................................................................................................................................9
P5.The importance of the commercial funnel and the application of NPD processing for
commercialisation of innovation.....................................................................................................9
P6 Build an Innovation Business Case for an organisation, including ways to access funding....10
TASK 4...............................................................................................................................................12
P7.The different tools that organisations can use to develop, retain and protect knowledge and
intellectual property.......................................................................................................................12
CONCLUSION .................................................................................................................................12
REFERENCES...................................................................................................................................13

INTRODUCTION
Innovation is a process which is used by an individual and organisation, so that they can
convert their unique though into some products and services. As this will help them in attracting
ample number of customers, so that they can serve them their products and services and also can
gain huge profit. Along with this, it is also known as making of new products according to needs
and demands of their customers, so that they can make their customers satisfied. In present report,
chosen organisation is Essence Drink, which is one of the biggest soft drink providing organisation
of the world. As from last 2 years, they are providing mango Lassi to their customers and have
earned huge profit. But in third year, market share of them has been reduced and also for regaining
their market position, it is very much important for them to make some new product, so that they
can again attract huge number of customer towards them (Aarikka-Stenroos, Sandberg and
Lehtimäki, 2014). In this report, a discussion will take place on 4 P's of marketing along with this
study will take place on terms invention and innovation. Along with this, implementation of frugal
innovation and innovation funnel will take place for Essesnce Drink. Along with this, a new product
will get prepared for them, and commercial funnel will also be discussed to commercialise the
process of innovation. Also in the last, budget will also get designed for them, and so that they can
get information about the funds required by them for making and launching an innovative product.
TASK 1
P1.Define innovation and ascertain its importance to organisations and difference with invention.
Innovation refers to making of new products and services according to needs and demands
of their customers, so that they can make their customers satisfied. Also, it is said as sign of positive
change at market place. Also, in this process new and unique products get designed for customers,
from some existing products, and also it use to make ample number of changes in models and
operations of an organisation. Along with this, it affect the working environment of them, so that
they can produce more appropriate and effective products and services for their customers.
Therefore, it has been recommended to Essence Drink and their manager to make make some new
products, which have some thing unique like their taste or flavour. In this they can add some range
of products and flavour in Lassi, like pineapple, apple, mix fruit and other. This all will help them in
attracting ample number of customers which are fruit lover and also love to consume healthy food
items (Brunswicker and Van de Vrande, 2014). As this will be beneficial for them in several ways
and some of these are as follow :-
1. Innovation help an organisation in finding solution of some difficult problems.
2. Along with this, it help work force of an organisation in improving their productivity, so that
they can increase their revenue and profitability.

3. Also, it help organisation in gaining information about hidden qualities of their employees,
which they will use to innovate new product for some existing products.
4. Along with this, innovation helps an organisation in gaining some competitive advancement.
5. It also help in making improvement to brand value and brand recognition.
6. Also, innovation help an organisation in making good relationships with their employees
and with their customers.
Therefore, it is very much essential for Essence Drink to make innovation in their products,
so that they can gain some competitive advancement and also attract huge number of customers
towards the products and services offered by them (Brusakova and Kosuhina, 2015).
Comparison Chart of the Innovation and Invention
As, innovation is the process under which new products are created by an individual and
organisation from their existing products, where as invention is step taken by them so that they can
make new and unique product and service for their customers. This both are used by organisations
and individuals so that they can gain huge profitability. Therefore, in present report Essence Drink
is going to innovate a new product rather then inventing some new product. Beneath is comparison
chart between invention and innovation :-
Basis of Comparison Invention Innovation
Meaning This is the process under which new
product has been developed which had
never been produced by any one.
This is the process of where new
ideas get implemented so that
they can make a new product
from existing one.
What is it ? This is concept of making and
inventing a new product.
It is a process where new idea get
implemented in existing product,
so that it's value get changed.
Skills Required Required knowledge, scientific skills,
financial aid and competence.
Required technical knowledge,
strategic and marketing skills,
financial support.
Concept New and unique idea which is
practically possible (Carayannis,
Grigoroudis and Goletsis, 2016).
This is the step of implementing
new idea in existing products for
making them new.
Occurrence This happen when new idea struck in
mind.
This occur when an individual
and organisation feel
requirements of change at work

place.
Concerned with This is to be concerned as the Single
product or process.
This is the combination of the
various products and processes.
Activities The invention is restricts only to the
research and development department.
The innovation is explored in all
over the organisation.
Examples The invention of telephone, electricity
and the printing press,etc.
Introduction of the smartphone,
TV, tablet, etc.
P2. How organisational vision, leadership, culture and teamwork can shape innovation and
commercialisation.
For an organisation, it is very much important for an organisation to have clear vision and
mission of them, along with good working culture and leadership, as this all will help them in
setting their goals and objectives and also help them in attaining these goals and objectives
(Fabrizio and Tsolmon, 2014). As for Essence Drink, it is very much important for to have proper
vision and mission, so that they can make appropriate changes in their existing products for
innovating them.
1. Vision : The vision of Essence Drink understand the needs of their customers, so that they
can make appropriate innovation in their. As this all help them in attracting ample number of
customers, so that they can improve their profitability.
2. Culture : It is very much important for Essence Drink to have working environment
cheerful, so that their employees can get encouraged and also get recharged to make
innovation in their existing products.
3. Teamwork : Team work is very much important for an organisation like Essence Drink, as it
help them in dividing the huge tasks in small units, so that they can get completed easily.
4. Leadership : As leadership is very much important part of Essence Drink, as this help them
in motivating and encouraging their employees, so that they can easily innovate some
product, which can fulfil the needs and demands of their customers.

TASK 2
P3.The 4Ps of innovation and explain the use of the innovation funnel to examine and shape
innovative ideas.
Innovation mix is a business model which help in detailing about the 4 P's of innovation.
This model was given by Johgn Bessant and Joe Tidd. For Essence Drink 4 P's of innovation mix is
given below :-
1. Product : In this, the product which organisation is going to offer their target customers is
described (Chesbrough and Bogers, 2014). As in context of Essence Drink, they are going to
innovate some new flavoured lassi, so that their revenue get increased.
2. Process : This help in detailing about the process which organisation use to adopt, so that
they can deliver their products and services to their customers. As, employees of Essence
Drink use to adopt an effective path, which help them in gaining attention of ample number
of customers.
3. Position : In this step, organisation like Essence Drink have to make an analysis on their
position at market place and use to analyse the needs and demands of their customers. As
this all help them in changes in their products accordingly.
4. Paradigm : This is the process, where Essence Drink use to make study on use of the
product which they have developed and also on that why the product has been developed
(Fu and Mu, 2014). As this help them in detailing their products to customers and end users.
Innovation Funnel – This a model which is used by organisations and individuals so that
Illustration 1: 4Ps of Innovation

they can analyse the ideas and also make products more conceptualized. As this model also help in
explaining the steps which are taken by an organisation for developing their existing product. As,
the main motive of this is to find the actual position of new product in competitive market. Beneath
is detail about this model :-
1. Opportunity Assessment : This is the step, where Essence Drink use to make analysis of
needs and demands of their from their products and services. This help them in getting detail
about that what changes they have to make in their products, so that requirements of their
customers can get fulfilled.
2. Insight based Ideation : This is the step where, Essence Drink use to make detail about their
products, so that they can identify the opportunities which they have for their innovative
products. For this, the research method which they can use are survey and online survey.
3. Conceptualization : In this step, Essence Drink use hire a consultancy firm, so that they can
get new idea for Flavoured Lassi. This also help them in designing and innovating their
products in a manner, so that ample number of customers get attracted towards the products
and services offered by Essence Drink.
4. Evaluation and Benchmarking : This is the step, where Essence Drick use to take the
review from their customers about the products which they are offering to their customers.
As this phase is just like testing, as here sample of product is been provide by organisation
so that customers of them taste it and detail them what improvement is required by product.
5. Go/No Go : After evaluating and testing the product, in this stage Essence Drink use to
make analysis that the innovative product is value for money for their customers or not.
6. Launch : This is the last stage, where Essence Drink use to launch their new and innovative
product at market place, which get a goof result in testing phase (Kilelu, Klerkx and
Leeuwis, 2014). As also, this will help them in increasing their revenue and profitability.
P4. Frugal innovation and its use in organisation.
Frugal Innovation : This is a process of discovering new business model and improves the
quality of their product and services in order to maintain sustainability for longer period of time.
Basically, it is used for removing or eliminating unnecessary attributes from a long lasting products
or innovative products. This term is also known as frugal engineering as it main perspective is to
innovate or redesign the product and services for fulfilling customers need and requirement. Along
with this, frugal innovation plays crucial role in an organisation as it aids to develop and maintain
the growth of an economy in an effective manner (Libaers, 2014). In context to Essence Drink, they
bring innovation in their product such as bringing various flavours in Lassi by which they enhance
their sale and attract new customers towards their product and brand.
1. New Market opportunities : This is necessary for an every organisation that to survey the

whole market before launching an innovative product. This is because it will aid an
organisation to know about their competitors strategies and customers need and
requirement. With the help of investigation, organisation can bring positive response in
their innovative product i.e., various flavour of Lassi and increase their sales effectively at
market place.
2. Resources : It is compulsory for an organisation to use optimum mutilation of resources in
their working place so that they can develop product in an effective manner and maintain
its sustainability at competitive market for long period of time in order to attain
organisational objectives and earn more profits.
3. Innovation funnel : It refers that to describe about the stage of overall development of an
innovative product. This means Essence Drink launch new product that is they bring
various flavour in Lassi by which they get attention of new customer and retaining old
customer for increase their sale in the market. Along with this, they maintain their position
at competitive market for and enhancing their growth in an appropriate way.
Frugal innovation consists of two sections which are stated below -1. Problem : During a stage of innovation or launching a product, firm face many issues or
problems in their working place by which it will create a negative impact on customers mind
(McKelvey, 2014). So, it is necessary for an Essence Drink to solve the market problems
and launch their new innovative product in the competitive market.2. Related to Product : This is necessary for an organisation to promote their product and
generate awareness about its existing product or new innovative product in order to gain
attention of more customers and enhance their sales by which organisation can achieve their
goals and objectives in an effective manner.
Generating idea of innovation
It means organisation should analyse the market for identifying about market condition and
customers need or requirement as this will aid them to product or innovate product in effective
manner. Along with this, firm will achieve their goals and objectives and move towards success at
market place. There are various steps of frugal innovation which are described as below-
 Screening new Idea : This is necessary for every organisation to make a proper planning
about innovate product so that they will satisfying customers demand accordingly.
 Idea Screening : In this stage Essence Drink screened the idea and decide they will innovate
a product which means bring flavour in Lassi.
 Testing : In this stage company offer sample product into the market and get feedback or
review from customer about their innovative product (Paradkar, Knight and Hansen, 2015).
 Internal analysis : This step aid an organisation to analyse and identifying about

effectiveness of innovative product.
 Review Competitive Market : It means Essence Drink survey a market for analysing about
the sustainability of new product at competitive market in context to fulfilling the need and
requirement of customers.
TASK 3
P5.The importance of the commercial funnel and the application of NPD processing for
commercialisation of innovation.
Commercial funnel refers to sales and revenue funnel of an organisation, which is used by
them to show the purchasing process of them at the time when buyers use to buy their products and
services. This help them in getting detail about the journey of their customers, while purchasing the
products and services. This funnel had been classified in three phases, which are described below :- Pricing Policy : As for Essence Drink, it is very much important for them to make pricing
policies for their products with the help of commercial funnel. As this will help them in
adopting moderate pricing policies for their products and services, so that huge number of
customers can get attracted towards these products and services. The main objective of the
firm is to set prices of goods and services which can be afford by the customers and provide
satisfaction to their needs and requirements. It will be helpful for making enhancement in
the productivity of the company. Helps in improving the growing Business : As, here commercial funnel will help Essence
Drink, so that they can analyse the level of their customers and also can provide products
according to it, so that they can fulfil the needs and demands of their customers (Partanen,
Chetty and Rajala, 2014). This all help Essence Drink in increasing their revenue and
profitability. It is also helpful for get long term advantages from the market. By monitoring
the needs and demands of the market, the firm can generate their brand image and set up
their competitive advantages. Growth by advanced technology : As, for Essence Drink it is very much important for them
to launch their new flavoured lassi with new technologies, which help them in promoting
and advertising their products in effective manner. As all will help organisation in growing
their business at market place. Implement investigation programmes : For innovating a new product, it is very much
important for an organisation like Essence Drink to analyse and make study for the needs
and demands of their customers. Along with this it is very much important for them to
determine that what are the expectations of customers for them and from their products.
Steps for the process of new Product development

 Idea generation : This is the step, where idea for new and innovative product at market
place is generated, so that Essence Drink can fulfil the needs and demands of their
customers. Idea evaluation : In this step, idea get evaluated and then non required things get eliminated
from that idea. Concept definition : This is the step which is used for finalising that what innovation
Essence Drink have to make in their products of flavoured lassi. Strategic analysis : This is the step which is used by Essence Drink in gaining knowledge
about the strategies adopted by them are helpful for them or not. Also help in detailing that
the pricing strategies used by them will help them in gaining some profit margin or not. Product development and testing : This is testing phase where Essence Drink is going to
develop and test new product which is flavoured lassi (Pellikka, 2014). Market Testing : At this step, Essence Drink will analyse the time which is required by them
for producing new products. Commercialisation : The price for new product will get finalised according to market plan of
that product.
 Product launch : Here Essence Drink will launch their innovative product which is
flavoured lassi.
P6 Build an Innovation Business Case for an organisation, including ways to access funding.
Business case is a process of things, that are required by an organisation like Essence Drink
so that they can complete the product which they are innovating (Pustovrh and Jaklič, 2014). As, for
them estimation of budget is very much important, so that they can develop proper innovation
business case.
Estimated Total expenses of the Firm
Type of expenses Cost
Manufacturing expenses $300
Raw material expenses $500
Labour expenses $550
Management expenses $200
Marketing expenses $250
Total $1850
Estimated Total Revenue of the Firm

Name of the
product
Price of the
product
Quantity of the
product
Revenue from single type of
product
Mango Lassi $ 2 200 $400
Orange Lassi $ 2 100 $200
Pineapple Lassi $ 2 200 $400
Litchi Lassi $3.50 100 $300
Plain Lassi $ 1.50 400 $600
Total revenue $1900
Therefore, estimated total profit of the company may be – (Total Revenue – Total Expenses)
= ($1900 - $1850)
= $ 50
The things which are required are as follows -
1. Executive Summary : This summary have the details about the products which Essence
Drink is going to launch at market place which is flavoured lassi. Also, in this it is required
by them to apply strategies that can help them in making market study. In this they can use
SWOT analysis and PESTLE, as this all lead the organisation in effectively launching their
products at market place.
2. Mission statement : The mission of Essence Drink is to analyse the need of their customers
and provide them products and services for fulfilling their demands.
3. Resources : Resource which are needed for producing the product and service are required
to be utilised properly (Greenaway and Rudd, 2014).
4. Market analysis : Here Essence Drink will analyse market and need of their customers, so
that they can produce innovative products accordingly.
5. Cost and benefit analysis : After making analysis of market, it is very much important for
them to analyse the cost and margin of that product.
Ways of funding
As funds are the back bone of an organisation and it is very much important for them,
because without it is not possible for any one to perform their operations and also not possible to
innovate any new product. Essence Drink can generate funds from many sources, some of them
are :-
 Bank and Financial institution : Banks are the biggest source of funds, as they use to

provide loans and credits which Essence can use in their business and also effectively
innovate new product.
 From family and friends – Another source of fund is friends and family, as this person do not
need to pay any type of interest and also can produce new product.
TASK 4
P7.The different tools that organisations can use to develop, retain and protect knowledge and
intellectual property.
There are different rules and regulations of government of UK, which will help Essence
Drink in protecting their products from their rivals. Some of these are detailed beneath :- Copyrights : Copyright are the type of rights which are reserved by inventor of product, and
say that the person has invented the product and no one have right to copy it in any manner.
For the purpose of this company, the management of the firm can utilized this tool to take
copyright of its products Lassi reason being this is an unique innovation which is doing by
the firm. Trade secrets : This is a type of secret detail of commercial belief, that's why it is not
possible for it to save organisation from potential risk (Singh, Wong and Ho, 2015). It is
assigning significant design, sign and symbols which are related to products and services
which make difference from other rivalries. With the help of the firm can easily increase its
market share and gain competitive advantages from its rivals.
 Patent : This is the right which is provided to producer of product and service, and also said
that no other person are able to access the product. It is an effective and important tool
which provide right to owner of the product to exploiting innovation. With the iof this tool,
Essence Drinks can make improvement in their brand image and gain competitive edge at
market.
CONCLUSION
From the above report, it has been concluded that, innovation is very much helpful for an
organisation, as this help them in making new products from old one so that they can increase their
market share. Also for innovating a new product, it is very much important for them to make
innovation mix, so that they can implementation idea in proper manner. Along with this, it has been
concluded that budget plays a vital role in innovation of a products and also help an organisation in
attaining information about the profit margin which they will get from that product and service.

REFERENCES
Books and Journals
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innovations: A review of how divergent network actors contribute.Industrial Marketing
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Brunswicker, S. and Van de Vrande, V., 2014. Exploring open innovation in small and medium-
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McKelvey, M., 2014. Science, technology and business innovation. M., Dodgson, D., Gann and N.,
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